Sen. Warren pushes ‘Direct File’ bill to simplify taxes, cut filing costs for consumers
TurboTax, H&R Block are lobbying Congress to defeat the measure, as they have in the past
A push to make tax filing as simple as “click and submit”
Sen. Elizabeth Warren (D-MA) is renewing her push to overhaul how Americans file their taxes, introducing legislation that would create a permanent, nationwide free filing system run directly by the Internal Revenue Service.
The proposal — known as the Direct File Act — would build on the IRS’s recent pilot program of that name and allow most taxpayers to file their federal income taxes online at no cost, without relying on private tax preparation companies or paid software.
Warren and other supporters say the current system is overly complex, expensive, and tilted toward corporate intermediaries — even though, in many cases, the government already has much of the information needed to calculate a taxpayer’s return.
How Direct File would work
At its core, the bill would require the Internal Revenue Service to offer a fully functional, user-friendly online filing system available to all eligible taxpayers.
Under the plan:
Taxpayers could file directly with the IRS for free;
The system would pre-fill income and withholding data already reported to the government;
Users could review, adjust, and submit returns in minutes;
Refunds could be processed faster, with fewer errors.
The idea mirrors systems already used in many other countries, where filing taxes can take minutes instead of hours.
The cost of the current system
Americans spend billions each year on tax preparation services — a burden that falls hardest on low- and moderate-income households.
According to government estimates and consumer advocates:
Taxpayers spend $10 billion+ annually on filing services;
The average filer spends hours navigating forms and software;
Many eligible taxpayers miss out on credits due to complexity.
Warren argues that these costs are unnecessary, given that employers and financial institutions already report most income data directly to the IRS.
“This is a system that forces people to pay to do their own taxes,” she has said in past statements, framing the issue as both a consumer protection and affordability concern.
Pilot program shows early promise
The IRS launched a limited Direct File pilot during recent tax seasons, allowing select taxpayers in certain states to file for free using a simplified online portal.
Early results suggested:
High user satisfaction rates;
Faster filing times;
Reduced reliance on paid preparers.
The Direct File Act would take that pilot and expand it nationwide, making the program permanent and significantly broader in scope.
Industry pushing back hard
The proposal is facing strong opposition from the tax preparation industry, including major players like Intuit and H&R Block, as it has in previous attempts.
According to quarterly lobbying disclosures published late Monday, Intuit, publisher of the popular tax preparation software TurboTax, spent $950,000 in the first quarter of 2026 nudging lawmakers on a range of issues, including efforts to beat back the Direct File Act and similar measures.
H&R Block, the second-biggest tax-prep provider, spent $790,000 in the first quarter to influence, among other things, a federal task force “on the replacement of Direct File,” created by the GOP’s 2025 tax law.
These companies have long argued that:
The tax code is too complex for a one-size-fits-all government system
Private software provides necessary guidance and customization
Government-run filing could create conflicts of interest
Tax-prep companies fiercely opposed the pilot version of Direct File because they viewed it as a competitor. The Trump administration shuttered the service — which operated during the 2024 and 2025 filing seasons — ahead of this year after Intuit and H&R Block argued the private sector ran similar services.
Consumer advocates counter that the industry has historically lobbied to keep filing complicated — preserving demand for paid services.
Not winning any consumer protection awards
You won’t find many consumers defending TurboTax and H&R Block. Both are targets of frequent complaints filed by consumers on the Better Business Bureau site and on consumer review sites. TurboTax has a 1.3 (out of 5) rating on ConsumerAffairs.com while H&R Block gets a 1.5 rating.
One angry consumer on Reddit described his first attempt at using TurboTax.
“I went through their platform, filled everything out, and paid over $200 in fees. Then I received an email saying there was an error and the return wasn’t filed. I corrected the issue and tried to file again, only to be asked to pay the same fee again,” the consumer said.
“When I called customer support, I was told to fill out a form to request a refund. I did that, but now I’m being told I won’t get my money back and will need to pay again to refile. This is unacceptable.”
It’s not just consumers who are wary of the companies. TurboTax is more or less routinely challenged by regulators over its advertisements that offer “free” tax filing but which too often wind up charging hefty fees. In a 2024 case, the Federal Trade Commission (FTC).
“The Commission alleges that the company’s ubiquitous advertisements touting their supposedly “free” products—some of which have consisted almost entirely of the word “free” spoken repeatedly—mislead consumers into believing that they can file their taxes for free with TurboTax. In fact, most tax filers can’t use the company’s “free” service because it is not available to millions of taxpayers, such as those who get a 1099 form for work in the gig economy, or those who earn farm income. In 2020, for example, approximately two-thirds of tax filers could not use TurboTax’s free product.” - FTC, 2/29/2024
A few days earlier, the FTC delivered a similar tongue-lashing to HR Block:
“H&R Block designed its online products to present an obstacle course of tedious challenges to consumers, pressuring them into overpaying for its products,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s action demonstrates that companies using coercive techniques that harm consumers can expect to hear from the FTC.” FTC 2/23/2024
What this means for consumers
If enacted, the Direct File Act could significantly reshape how Americans interact with the tax system:
Lower costs: Millions could file for free instead of paying for software or preparers;
Less stress: Pre-filled returns could reduce errors and confusion;
Faster refunds: Streamlined processing may speed up payments;
Greater access: More people could claim credits like the Earned Income Tax Credit.
For households already dealing with rising costs — from housing to groceries — eliminating tax filing fees could offer a small but meaningful financial break.
The road ahead
The bill faces an uncertain path in Congress, particularly amid ongoing debates over IRS funding, the role of government in financial services and big bucks from lobbyists and influencers acting on behalf of the companies.
Still, the idea of direct, free filing has gained traction in recent years, with bipartisan interest in simplifying the tax code and reducing burdens on everyday taxpayers.
Whether the Direct File Act becomes law or not, the broader shift is clear: pressure is mounting to turn tax filing from a costly annual chore into a simpler, faster, and — for many — free process.